Re-employing staff after Covid

Many small businesses have had to make people redundant due to Covid. But you can rehire those same people again, providing you follow the rules, says Sue Tumelty

The seismic impact of the Covid-19 pandemic raised the unfortunate prospect of redundancy for many UK firms in affected sectors, despite unprecedented Government support. However, those businesses which go on to survive following such hardship may well be in a position of needing to start re-employing staff.

What then is the process of taking on staff who have recently been made redundant? And where are the pitfalls?

Genuine redundancy

Employers looking to re-hire staff who have recently lost their jobs need to be aware of the risk of having unfair dismissal levelled at them. Any employees who have been made redundant may claim to have been wrongly dismissed if the same company is then taking on new staff only a short time later.

It is therefore imperative that your original redundancy programme was based on genuine and provable business needs:

Requirements to perform that role may have ceased or diminished or are expected to
Locations where the work was performed may have closed
Your business may be undergoing a necessary reduction in business costs, or deploying improved technology or organisational changes

All these are valid reasons for staff loss. However, you’ll have needed to offer alternatives to redundancy wherever possible so that job losses were only deployed as a last resort.

Any new employment shortly after a redundancy programme may expose deficiencies during that period. So the first step through this episode is to ensure that your redundancy processes were compliant, using selection pools and fair criteria, and not based on any discrimination against protected characteristics, and done with proper adherence to contractual notice periods and pay.

>See also: Statutory maternity pay UK

Changing conditions

Just as your redundancy should have been based on a genuine need, you should also have solid and provable grounds for now needing more staff. Assuming you as an employer can provide economic justification for taking on more employees, there is no reason why you can’t take on staff who have previously been made redundant.

As an employer, proper and considerate treatment of your staff during the redundancy process will hopefully have left the door open for taking on the same people if conditions change. This shows the importance of good culture in the business. There are some situations, for example with local authorities, where redundancy pay has to be paid back but this is not the case with SMEs.

>See also: Dismissing staff on long term sick leave

Implications of re-employing staff

There’s potential for confusion regarding continuity of employment if companies decide to start re-employing staff soon after redundancy.

Legally a break of a week and a day is needed to demonstrate that the continuity of employment has been genuinely broken. Staff members will retain their statutory right to redundancy payment here.

Remember also that the time limit for employees to make a claim for unfair dismissal is three months following redundancy. So you may like to wait for three months or more before re-hiring, as an extra safeguard against tribunal claims.

There are other implications to consider, too. In particular, employees should be aware that they are legally seen as brand-new employees if they are re-hired. So they start again in terms of earning rights to redundancy pay if the employer has eventually to go through the unfortunate process again.

Business owners should also be wary of falling foul of HMRC and any allegations that redundancy was used as a tax break, as redundancy payment is tax free.

Sue Tumelty is founder and executive director of The HR Dept

Further reading

Flexible working from day one – what it means for SMEs

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Sue Tumelty

Sue Tumelty is founder and executive director of The HR Dept Ltd.

Related Topics

Managing Staff

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